TaxTMI 
TaxTMI 
TaxTMI 
2019 (8) TMI 984
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.... were not genuine and, therefore, liable to be added either u/s 68 or 69C of the Act. 3.1 That the ld.CIT(A) was not justified in confirming the above addition of Rs. 59,51,29,517/- despite producing all the necessary evidence regarding purchase of goods; namely mobile phones imported from China and corresponding high sea sales made to the above four parties. 3.2 That during the course of assessment proceedings, statement of Director Shri Deepak Aggarwal was recorded u/s 131(1) of the Act, wherein he clearly explained the modus operandi of the trading business of mobile phones carried on by the appellant company and also produced bills with respect to mobile phones imported from China and copies of high sea sales agreements and hence, the ld.CIT(A) was not justified in confirming the addition made by the Assessing Officer." 4. At the time of hearing before us, it is stated by the learned counsel that the assessee derives income from import of mobile phones from China and its sale in India. That during the year under consideration, total sales were at Rs. 62,91,41,642/-, out of which, high sea sales are at Rs. 59,11,29,517/- and the local sales at Rs. 3,80,12,124/-. That the a....
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....ction 269ST only with effect from 1st April, 2017. That as per Customs Act/Rules, each and every high sea sales agreement is to be approved by the custom authorities and in assessee's case also, each and every high sea sales agreement is duly approved by them and copies of all such approvals by the office of Commissioner of Customs are furnished in the paper book. He also stated that complete details of the buyer are to be given to the custom authorities and no high sea sales agreement can be approved unless the buyer has an importer exporter code. He stated that the assessee makes the high sea sales to mainly four buyers and all of them are having importer exporter code. The details with regard to such importer exporter code in respect of each buyer is furnished in the paper book. That the delivery of goods from the custom authorities is taken by those buyers after the payment of excise duty. The necessary document in this regard was also produced before the Assessing Officer and copy of the same is given in the assessee's paper book. He, therefore, stated that merely because the consideration of the high sea sales was received in cash, would be no ground for holding the sales to....
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....019-TIOL-172-HC-DEL-IT. 9. Sumati Dayal Vs. CIT - SC 1995 AIR 2009 (SC). 10. CIT Vs. Durga Prasad More - 82 ITR 540 (SC). 11. CIT Vs. O. Mohankala - 291 ITR 287. 12. Pratham Telecom India Pvt.Ltd. Vs. DCIT - 2018-TIOL-1983-HCMUM- IT. 13. PCIT Vs. Bikram Singh 399 ITR 407 (Delhi). 6. In the rejoinder, it is stated by the learned counsel that none of the decisions relied upon by learned DR would be applicable because in this case, it is not in fact a credit at all but it is the recovery of the sale consideration of the goods sold by the assessee. 7. We have carefully considered the arguments of both the sides and perused the material placed before us. Admittedly, the assessee derives income from import of mobile phones from China and its sales in India. The major portion of the assessee's sales is by way of high sea sales i.e., out of the total sales of Rs. 62.91 crores, Rs. 59.11 crores of sales is on high sea sales basis. Such high sea sales is claimed to have been made to four parties viz., System Telecom, Blues And Jacks Overseas, M/s V.K.S. Concepts and M/s Skum Trading. The Assessing Officer issued notice under Section 133(6) to the above buyers. However, such noti....
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....wability or disallowability of any deduction and moreover, the question of disallowance may arise in respect of any expenditure or allowance claimed by the assessee. In respect of a sale consideration, there cannot be any question of any disallowance. In the second paragraph above, the Assessing Officer has alternatively applied Section 69C. Section 69C is also for unexplained expenditure. Admittedly, there is no question of any unexplained expenditure in the case under appeal before us and therefore, Section 69C is also not applicable. 9. Further, we find the stand of the Assessing Officer to be contradictory. On one hand, he mentioned the high sea sales to be not genuine and on the other, he has accepted the business income disclosed by the assessee. Admittedly, the business income disclosed by the assessee has been worked out after considering the purchases and sales of mobile phones. The sales included the high sea sales also. Once the Assessing Officer has accepted the trading results, he has accepted the sales including high sea sales. Therefore, his stand while making the addition under Section 68 or 69C is contradictory to his stand taken while accepting the business incom....
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....les. Moreover, all the buyers of goods from high sea sales have importer exporter code. Copy of importer exporter code of all the buyers is placed in the paper book and we find that this importer exporter code also gives the name and address of the parties to whom importer exporter code is given, its phone number, e-mail address, date of establishment, banker details, name of the directors etc. That the delivery of goods is taken from the custom authorities by those buyers and not the assessee. In the document for export clearance, the name of those buyers is mentioned as importer of the goods and not the assessee. That the return of notices issued under Section 133(6) unserved by the postal authorities is certainly a ground for raising suspicion with regard to identity of the parties. However, it is not sufficient to reach to the conclusion that sales to those parties are not genuine. In fact, the documentary evidences produced by the assessee i.e., approval of high sea sales by custom authorities and clearance of goods from customs after payment of import duty by the buyers on high sea sales basis proves the genuineness of sales beyond doubt. 12. Coming to the cash payment of s....
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....which the appellant made the alleged winnings. (iv) While the appellant's capital account was credited with the gross amount of race winnings, there were no debits either for expenses and purchases of tickets or for losses. (v) In view of the exceptional luck claimed to have been enjoyed by the appellant, her loss of interest in races from 1972 assumed significance. The Settlement Commission took the view that winnings in racing became liable to income-tax from April 1, 1972, but one would not give up an activity yielding or likely to yield a large income merely because the income would suffer tax and that the position would be different, however, if the claim of winnings in races was false and what were passed off as such winnings really represented the appellant's taxable income from some undisclosed sources. On appeal to Hon'ble Supreme Court, it was held as under :- "Held, dismissing the appeal, that the Settlement Commission after considering the surrounding circumstances and applying the test of human probabilities had rightly concluded that the appellant's claim about the amount being her winnings from races was not genuine." 13.1 Now, coming to the facts of the asses....
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....ime of hearing before us, it is stated by the learned counsel that all the above persons are directors in the assessee company. They all are assessed to tax in their independent capacity. They have duly furnished their confirmation along with bank account as well as computation for assessment year 2013-14 and 2014-15. They have also explained that the above amounts were deposited with the assessee company out of the sale proceeds of the shares of M/s Monix Exim Pvt.Ltd. That the shares were transferred to Shri Dharmender Rathee and complete details i.e., name and address of Shri Dharmender Rathee and his permanent account number was also given to the Assessing Officer. The Assessing Officer did not accept the credit in the name of the above persons merely on the ground that he did not appear in response to summon issued under Section 131. He stated that the assessee has duly discharged the onus of proving the credit in its bank account. That the Assessing Officer never directed the assessee to produce Shri Dharmender Rathee. Otherwise, the assessee would have produced him and even if the Bench directs the assessee to produce Shri Dharmender Rathee, the assessee is ready to produ....
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....ficer to consider all the evidences produced by the assessee in this regard. We further direct him if after considering the evidences produced by the assessee he requires the presence of Shri Dharmender Rathee, he will give a suitable date and direct the assessee to produce him. Thereafter, he will readjudicate the matter in accordance with law after considering all the evidences as have been produced or as may be produced by the assessee before him. Needless to mention that he will allow adequate opportunity of being heard to the assessee. 21. Ground No.5 of the assessee's appeal reads as under :- "That on the facts and circumstances of the case, the ld.CIT(A) is not justified in confirming the disallowance of petty cash expenses amounting to Rs. 11,03,294/- without giving any cogent reasons." 22. We have heard the arguments of both the sides and perused the material placed before us. The Assessing Officer made the disallowance of the entire expenditure claimed by the assessee with the following finding :- "The assessee company has claimed miscellaneous expenses at Rs. 11,03,294/- and from the details filed by the assessee company it is seen that all these expenses are made....